On 1 July 2004, the Act on Cash Payments
Restriction, No. 254/2004 (the "Act") will become effective.
This Act obliges individuals and legal entities to make payments
exceeding EUR 15,000 (or the equivalent in another currency)
by bank transfer through a bank; foreign bank
branch; savings bank; credit institution or via
a postal services provider by way of a voucher payment into a
bank account and not in cash.
The obligation to make payments by way
of bank transfer applies to payments made
between individuals/legal entities
resident/having a registered office in the Czech Republic as well
as payments by such individuals/entities in favour of
individuals/legal entities resident/having a registered office in
a foreign country.
The EUR 15,000
limit includes payments made by one payer in favour of another
payee in any 24-hour period.
Under the Act,
a breach of this obligation may result in a fine being imposed by
the relevant authorities (local financial bodies/customs bodies) of
between CZK 10,000 (minimum) and CZK 5,000,000.
The Act has
partial retrospective effect as it stipulates that if discharge of
an obligation by a cash payment, exceeding the limit referred
to above, was agreed prior to the date of effectiveness of the Act,
such cash payment must be made no later than one year after this
Act becomes effective.
For further
information please contact Kveta Vojtova at kveta.vojtova@cms-cmck.com or on +420 221 098
847.